When it comes to the healthcare industry, there are many sub sectors investors and potential investors should research before considering a position in what they think is the next home-run stock. Today, I'm going to focus on two biotech companies, both of which I think possess strong growth potential and potential investors should consider a small to medium size position in either moving forward.
ImmunoCellular Therapeutics, Ltd. (IMUC) opened trading at $2.56/share on Tuesday as it was noted that CEO Manish Singh resigned and was immediately replaced with John S. Yu, M.D., who was appointed interim CEO. "This is an exciting period in ImmunoCellulars development as an emerging leader in cancer immunotherapy. With the broad potential inherent in our platform technology, and our demonstrated ability to execute on our clinical strategies, we are well positioned to expand our development portfolio into new cancer indications that represent significant unmet medical needs and for which our unique immunotherapeutic approaches hold great promise", he said. I think the change serves as a positive for the company, considering Dr. Yu is the current chief scientific officer and will remain in that post as the company searches for a permanent CEO.
Shares were getting hammered during the first hours of trading, down nearly 14.50% but I think this sell-off is actually presenting a buying opportunity, especially if we take a closer look at a few fundamental variables surrounding IMUC's stock. Over the last 12 months, the company has carried zero debt and kept roughly $11.34 million dollars in cash on its books, which are both very good things considering they equate to a total-debt to total-cash ratio of 0.00. Secondly, of the 40.62 million shares outstanding, 7.08% are currently held by insiders, which is a pretty good number considering insiders only hold 5.51% of the outstanding shares of Progenics Pharmaceuticals, Inc. (PGNX), and 1.63% of the outstanding shares of Dendreon Corp. (DNDN). Lastly, and during the company's most recent earnings related conference call, the company ended the second quarter with $11.3 million dollars in cash on its books, expanded the enrollment of its Phase II clinical trial of ICT-107 and received FDA clearance for a new IND application for the Phase I trial of ICT-121.
Pluristem Therapeutics, Inc. (PSTI) opened trading at $4.21/share on Tuesday on news that the company renewed its partnership with Berlin-Brandenburg Center for Regenerative Therapy (BCRT), a German research institution in an effort to collaborate on and enhance the company's current pipeline, which includes but is not limited to PLX-PAD, which has recently completed Phase I clinical trials. The company noted in its press release regarding the collaboration:
"As a result of our cooperation to date, we have enhanced and expanded our product pipeline. Our PLX cells may hold the key to a number of regenerative therapies and working with one of the leading institutions in the world in the field of regenerative medicine is extremely important to us," commented Pluristem Chairman and CEO, Mr. Zami Aberman. "We look forward to further progress on indications in which we already have pre-clinical initiatives as well as discoveries in new indications."
I think the renewal of such a collaborative effort will certainly enhance the growth of Pluristem not only from a development perspective but from a fundamental one as well. Over the last 12 months the numbers haven't been all that bad considering the company currently has $39.54 million cash on its book and absolutely no debt, not to mention the fact that insiders currently hold 10.05% of the shares outstanding and analysts are expecting PSTI to grow 11.10% for the quarter and 8.60% for the year.
Potential investors looking to establish a position in either company should do so from a long term perspective as both companies possess unique long term catalysts. For starters, the transition at IMUC, in my opinion, is one of the better ones we've seen in years as the outgoing CEO left the company in a very good position as noted by my SA colleague Brian Nichols:
"Dr. Singh has been critical to the success of IMUC in terms of building awareness around the company, raising capital and executing on its business plan. During his tenure, since February 2008, the company has gone from a $7 million market capitalization to over $100 million today. However, one needs to make a clear distinction that IMUC's success has been primarily driven by the clinical data and its product concept to target roots of the cancer. As the existing clinical geniuses and inventors at IMUC will continue to lead the execution of their clinical development, the value associated with its product platform and its lead product remains unchanged."
With that said potential investors should establish a small to medium sized position in the company and add to that position as the company announces more and more positive data regarding their clinical data. In the case of PSTI, investors should establish a small to medium sized position and keep an eye out for future developments made through the company's collaboration with BCRT.